Business leaders call for better education, public works

California must make major improvements in transportation and education if the state is to maintain economic health, attract more businesses and create jobs.

That was the urgent message of corporate leaders at the Orange County Economic Development Forum Friday.

The forum, sponsored by the Orange County Business Council, is one of 16 regional gatherings that will make recommendations on how to make California more competitive nationally and globally.

"Orange County was spoiled with 3 percent unemployment for years," said Lucy Dunn, president and CEO of the council. "But the deep recession with 10 percent unemployment showed the need to focus on retaining our businesses and on attracting entrepreneurs."

International trade is a key driver of the local economy, Wallace Walrod, the council's chief economic advisor, told the gathering of 200 at Irvine's Hyatt Regency. Orange County exports have rebounded from the recession, reaching an all-time record high of nearly $25 billion and accounting for about 13 percent of the county's Gross Metropolitan Product, he said.

Panelist Michael Snow, President of SnowPure LLC, a San Clemente industrial water technology manufacturer, however, cautioned that "exporting is easy. The hard part is manufacturing in California. The challenge is infrastructure and workforce development."

Snow, who manufactures in China, as well as in Orange County, called for extending the Foothill South (241) tollway, restarting the San Onofre nuclear plant and upgrading Los Angeles International Airport. "LAX is a second-world airport," he said. "Shanghai, Tokyo and Beijing have beautiful airports."

Moreover, he added, "Rail needs to go to airports, as it does in the rest of the world. If we build a rail system that doesn't go to airports, then shame on us."

Snow and other panelists sounded alarms about California's educational system.

Noel Massie, President of UPS, South California district, said educational systems in China, South Korea and other nations have pulled ahead of California's schools. Orange County's dropout rate has improved, but too many students don't graduate from high school, he added.

Massie noted that San Diego's healthcare cluster and Silicon Valley's tech economy grew from the University of California. He called for a limit on out-of-state students at UC campuses, noting that a quarter of students at top UCs are coming from other states and countries. "But the UC is a public system...Just because someone wrote a big check from outside the country shouldn't give them a seat in the schools you built."

Another panelist, Mission Viejo Mayor Frank Ury, also an executive at Irvine-based Hitachi Data Systems, complained about the lack of "a balanced workforce in Orange County. It takes six to 12 months to hire competent people," he said.

But with "a virtualized workforce," engineers can communicate on the web, and the company is able to hire people in Arizona, Oregon and Nevada, he added. "This is an issue for California. International companies want to hire people who live here. We need to be developing those folks."

Other speakers echoed the complaint. A member of the audience criticized the moving of vocational training and workshops from high schools to colleges, saying, "If these kids can't get through high school, what makes you think they'll go to college?"

Snow, the water technology manufacturer, said his company has "a hard time finding good people with high school educations who can do math. And they don't have mechanical skills. People need to know what to do with a wrench, but our high schools have dropped the trade part of things."

He added, "I'm a fourth-generation Californian. I want California to succeed. But people in China are smart and aggressive. Their government makes strategic decisions that help manufacturers."

On a more upbeat note, Kish Rajan, director of Gov. Jerry Brown's Office of Business and Economic Development, said his office is stepping into the void created when the Legislature abolished the state's trade agency in 2003. With private funds, Brown has reopened a permanent trade office in Shanghai.

The new China office "is promoting exports from California into that rapidly growing economy and we are welcoming foreign direct investment" including $1.8 billion announced during Brown's recent trip to China, he said.